quote:

The Treasury Department is considering a plan to revitalize the U.S. home market that would push down interest rates for loans to purchase a home, according to people familiar with the matter. The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full point lower than prevailing rates for standard 30-year fixed-rate mortgages.

quote:

Regardless of price predictions there is another pressing issue. At the core of this it is very simply impossibly unfair to many American homeowners. The Journal makes clear that this program would only be available to home buyers and not those who currently own and are looking to refinance.

quote:

ORIGINAL: Sophie11

I think it's ridiculous. It doesn't even begin to acknowledge the real problem in the housing market.

The article talks about those who have $2000 a month for a mortgage and the different prices of homes they can afford depending on the interest rate, and how much better it is if they get more home for the buck.

The real problem is most of those people who "have" $2000 a month for a mortgage don't. In reality they can only afford $1200 a month for their mortgage, but they believe they can spend $2000.

quote:

ORIGINAL: _jjp_

quote:

ORIGINAL: Sophie11

I think it's ridiculous. It doesn't even begin to acknowledge the real problem in the housing market.

The article talks about those who have $2000 a month for a mortgage and the different prices of homes they can afford depending on the interest rate, and how much better it is if they get more home for the buck.

The real problem is most of those people who "have" $2000 a month for a mortgage don't. In reality they can only afford $1200 a month for their mortgage, but they believe they can spend $2000.

But it is there right to have a 5 bedroom 3 1/2 bath house for a 3 person family. I mean would we want them to be inconvenienced by having to share some of the same spaces?

quote:

ORIGINAL: Sophie11
Oh heavens no, how horrible.

I can only imagine what some would think of my little house! 2 bdrm, 1 bath (1 SMALL bath). Works fine for me, so does the SMALL mortgage payment!

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ORIGINAL: earthless

Guys...

Keep in mind housing markets where a 1 bedroom loft cost the same as a 5 bedroom brick house. My wife and I have one of those $2,000 + mortgages. We can't sell or make any adjustments to live more within our means. Why? Because everything around us costs the same or a lot more.

Heh.

quote:

ORIGINAL: Zhi

They are trying to create more demand in a market that is massively flooded with supply.

The major reason many people are getting foreclosed on is the fact that they cannot sell the house for the amount of mortgage they have on it, and sometimes they can't even sell it for an amount that the bank is willing to take in a short sale, which would also clobber their credit.

Nobody really expected the real estate market to go south like this. In the middle of it, people are losing their jobs due to the horrible economy, having to move just to be able to make enough to feed their families. They drained their savings trying to make it through unemployment, they're paying for both their current rental and for the house they left that they simply can't sell. They have to make a choice. Keep a roof over their family's head and food on the table, or pay the mortgage on a house that they don't live in, that has been on the market for months?

What would you pick?

It's a horrible situation all around.

If demand could just be pushed up in the housing market, then it would help a lot.

That being said, I do think that current homeowners should be eligible for refi at those rates, for the sake of fairness.

quote:

ORIGINAL: Lapidoth

The only solution to these problems is to kick those who created it
out of office and let someone else manage.

But, we have the very ones who created these problems managing
the funds. Hmmmmm, I'm missing chickens lately, guess I better
hire the fox to guard my hen house.

quote:

ORIGINAL: HisLamb26

What do I tihnk about 4.5% mortgage rates?

I think I'll refinance.

quote:

ORIGINAL: jbow

Of course they will be using your money to do it.

Maybe the snakes will eat the lizards...

quote:

The Treasury Department is considering a plan to revitalize the U.S. home market that would push down interest rates for loans to purchase a home, according to people familiar with the matter. The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full point lower than prevailing rates for standard 30-year fixed-rate mortgages.

quote:

Regardless of price predictions there is another pressing issue. At the core of this it is very simply impossibly unfair to many American homeowners. The Journal makes clear that this program would only be available to home buyers and not those who currently own and are looking to refinance.

http://briansullivan.blogs.foxbusiness.com/2008/12/03/the-government-hopes-the-snakes-can-solve-the-lizard-problem/

J

quote:

The "Free" Market has been part of the problem, so let's not pretend it will cure itself. Greedy home buyers did not start mortgage companies and write the loans themselves. There is plenty of blame to go around, including HGTV telling us how to get rich "flipping" houses.